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Difficult Environment Has Adversely Impacted voestalpine Results for H1

Steel News - Published on Tue, 12 Nov 2019

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For the voestalpine Group, the first half of the business year 2019/20 was defined by a substantial dampening of sentiment in its economic environment. Particularly in Europe, where voestalpine generates about two thirds of its revenue, the weakening of the export industry due to increasing global barriers to trade, decreasing demand from the automotive industry as well as fewer investments affected all of the Group’s divisions. But the global trade disputes are being reflected in declining economic momentum in China and the United States too. The adverse conditions in the steel sector intensified all the more on account of massive increases in raw materials prices in tandem with decreasing sales prices and large volume steel imports into Europe that continue unabated. Furthermore, the financial expenditures for CO2 allowances in the European Union as well as the corporate issue of start-up costs at the Group’s Automotive Components plant in Cartersville, Georgia, USA, continued to have adverse impact on the profit margins.

Revenue for the business year’s first six months declines by 2% year over year, from EUR 6.7 billion to EUR 6.5 billion

Operating result (EBITDA) is down 23%, from EUR 860 million to EUR 666 million

Profit from operations (EBIT) falls by 52%, from EUR 480 million to EUR 230 million

Profit before tax falls by 61%, from EUR 422 million to EUR 163 million, and profit after tax by 64%, from EUR 320 million to EUR 115 million

Group’s technology segments railway systems, aerospace, storage systems, and welding technology deliver stable performance in a difficult macroeconomic environment

Mr Herbert Eibensteiner, Chairman of the Management Board of voestalpine AG, said the economic downturn, which has been gathering speed in our key markets since the start of the current business year, along with the extremely challenging conditions in the steel sector, caused all earnings categories of the voestalpine Group to decline in the first six months of the business year 2019/20. In order to ensure that earnings are stabilized and the Group’s financial strength is restored as soon as possible, we are currently doing everything in our power to implement cost-cutting and efficiency enhancement programs throughout the Group. I want to emphasize at the same time that our consistent, strategic focus on becoming a one-stop provider of special and complete systems is paying off in these challenging times. For instance, our technology segments railway systems, aerospace, storage systems, and welding technology delivered stable performance in the business year’s first half despite the economic downturn.

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Posted By : Rabi Wangkhem on Tue, 12 Nov 2019
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